New Jersey is an equitable distribution state, meaning judges distribute assets based on fairness rather than equality in a divorce. In certain cases, spouses try to prevent their partners from receiving their fair share by hiding assets.
Tactics they use include stashing funds in offshore accounts, spending money exorbitantly or overpaying taxes to reduce wealth on paper and gifting money or assets to family members or friends who promise to give it back after the divorce finalization. The rise of digital currency has given individuals trying to conceal their true financial situation another avenue. Cryptocurrency is appealing for several reasons.
1. It does not leave behind receipts
Digital currency is hard for the average person to trace. There are no receipts for the spouse to track, only data blocks, and the user can hide behind private wallets.
2. It has a high value
The cryptocurrency market has a value in the trillions, according to CoinMarketCap. There is the potential to invest and retain large quantities of money. Due to its fully digital nature, it also offers an easy way to transfer funds quickly.
3. It has no government oversight
Cryptocurrency is not regulated by the government in the same way banks are. There is no central authority, which can make it even more challenging to identify when a spouse is using it to hide assets.
While a spouse unfamiliar with cryptocurrency may not be able to trace hidden assets by himself or herself, there are consultants like forensic accountants who can track them. Spouses who suspect asset concealment can report it to the court, which will appoint someone to investigate or hire their investigators.